Argentina: Cristina can’t pay up . . .

So she keeps looking for a settlement:
As posted earlier, the SCOTUS not only ruled that Argentina can’t make payments on its restructured debt unless it also pays the holdouts, but also that the creditors can get access to a wide number of bank records to locate financial assets overseas that they might be able to seize as compensation.

Let me translate this into plain English: Cristina’s saying that she’ll not abide by the terms of the contract upheld by the SCOTUS, but instead that she’ll agree to pay less when U.S. courts abide by Argentinian law, which is exactly what she’s been saying all along.

In her annual Flag Day speech, Mrs. Kirchner said Argentina would enter talks with the help of U.S. courts. “We only ask they create negotiating conditions that are just and in accordance with the Argentine constitution, laws and contracts we signed with 92.4% of our creditors,” Mrs. Kirchner said, referring to investors who accepted the restructured bonds.

There are fools out there who saw this as being conciliatory, and

The country’s restructured bonds jumped during Mrs. Kirchner’s speech on Friday, nearly wiping out their losses for the week.

dismissed the options of full payment or outright default as unthinkable. He said that the government would attempt to reroute its exchanged bonds from New York to Argentina, away from the reach of the United States’ courts. That would allow Argentina to continue paying the creditors it struck deals with in 2005 and 2010, without paying the holdouts.

“Transferring the bonds to local law would be very difficult at the street level,” warns Henry Weisburg at Shearman & Sterling, a law firm. First Argentina must convince a majority of holders of the exchanged bonds to agree to the swap. This task may be insurmountable given that many of the current creditors are bound by rules restricting them from holding assets under foreign jurisdiction.

Carrion trade
Even if Argentina were to succeed in persuading holders of the exchanged bonds to take the plunge, any intermediary that helped facilitate the rerouting risks being held in contempt of the New York courts. Argentina would thus need to find an intermediary that is not, and has no desire to be, subject to New York law. Lastly, Argentina would need to convince Bank of New York Mellon, its current trustee, to release information about the bondholders to its new intermediary. That could put the bank into contempt; it has already said it “will comply with any court order by which it is deemed bound.”

The offer to negotiate comes less than two weeks before Argentina has to make the next interest payment on its restructured bonds, which U.S. courts have said the country isn’t allowed to pay unless it also pays the holdout creditors. If Argentina misses the interest payment on June 30, the country sinks into technical default and will have another 30-day grace period to avoid an outright default.